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Home a Mixed Bag for Retailers in May

Retail Editor 5 -- Home Textiles Today, June 9, 2011

SalesNEW YORK - The month of May, in terms of sales and comps, could be summed up in two words - modest and mixed.
     Modest because of the mostly humble comp gains seen by 11 of the 13 major retailers tracked monthly by HTT - which ranged from mid to low single digits.
     And mixed as it relates to the performance of the home department, which at some stores was strong but at others was poor.
     JCPenney, which was already sore from its 1.0% overall comp decline for the month, was also hurt by home's negative numbers. The Plano, Texas-based mid-tier department store explained its home business was hurt by two impacts in the four weeks - the shift of a home mailer from April into May and the elimination of some category promotions that caused declines particularly in the furniture and window covering areas. As a result, JCP's online home sales were also down.
     At Minneapolis-based Target Corp., home just added to the discounter's disappointment for the month. The category's comps decreased in the low to mid single digits, with the strongest results stemming from stationary and holiday but the worst sales coming from decorative home.

 

2011 SALES 

2010 SALES

TOTAL %CHG. 

SAME-STORE %CHG.

BJ's Wholesale Club c  

$952.9  

$860.8  

10.7  

3.0 

The Bon-Ton Stores Inc.  

$181.0  

$186.5  

(2.9)  

(2.3) 

Costco Wholesale Corp. d e  

$7,140.0  

$6,090.0  

17.0  

6.0 

Dillard's Inc.  

$434.7  

$426.5  

2.0  

2.0 

Duckwall-ALCO Stores Inc.  

$39.8  

$38.2  

4.0  

3.3 

Fred's Inc.  

$143.5  

$141.5  

1.0  

0.2 

J. C. Penney Company Inc.  

$1,187.0  

$1,228.0  

(3.3)  

(1.0) 

Kohl's Corp. 

$1,372.0  

$1,338.0  

2.5  

0.8 

Macy's Inc.  

$1,937.0  

$1,786.0  

8.5  

7.4 

Ross Stores Inc. 

$661.0  

$614.0  

8.0  

4.0 

 

Stein Mart Inc.

$98.5  

$98.7  

(0.2)  

0.7 

Target Corp.  

$4,799.0  

$4,622.0  

3.8  

2.8 

The TJX Companies Inc.  

$1,700.0  

$1,600.0  

7.0  

2.0 

13 WEEKS 

 

2011 Sales 

2010 Sales 

TOTAL %CHG. 

SAME-STORE % CHG. 

BJ's Wholesale Club c  

$3,722.2  

$3,377.2  

10.2  

2.6 

The Bon-Ton Stores Inc.  

$830.9  

$847.9  

(2.0)  

(1.4) 

Costco Wholesale Corp. f  

$64,750.0  

$57,170.0  

13.0  

4.0 

Dillard's Inc.  

$1,895.5  

$1,858.8  

2.0  

2.0 

Duckwall-ALCO Stores Inc.  

$154.3  

$146.7  

5.2  

3.2 

Fred's Inc.  

$627.9  

$613.1  

2.0  

0.8 

J. C. Penney Company Inc.  

$5,130.0  

$5,157.0  

(0.5)  

2.7 

Kohl's Corp.  

$5,534.0  

$5,373.0  

3.0  

1.2 

Macy's Inc.  

$7,826.0 

$7,360.0  

6.3 

5.9 

Ross Stores Inc. 

$2,736.0  

$2,549.0  

7.0  

4.0 

Stein Mart Inc.  

$402.0  

$399.7  

0.6  

1.3 

Target Corp.  

$20,379.0  

$19,780.0  

3.0  

2.2 

The TJX Companies Inc.  

$6,900.0  

$6,600.0  

5.0  

2.0 

a. Reporting periods vary from chain to chain.
b.These comp results exclude the impact of gasoline. Including a contribution from sales of gasoline, comps increased in the month by 7.4%.
c.These comp results exclude the positive impact from sales of gasoline. Including a contribution from gas sales, comps increased year to date by 6.5%.
d.Total sales results in May include sales from the company's Mexico joint venture; without those sales, the net sales increase would have been 14.0%.
e.These comp results are for the U.S. division and do not include the positive impacts of inflation in gasoline prices and strengthening foreign currencies. Including those impacts, comps for the month of May were up 11% in the U.S. division, 21% in the international division, and 13% for the total company.
f. Because it is on a different fiscal calendar than the other key retailers on this list, Costco's year-to-date sales and comp results reflect the past 39-week period. Year-to-date comp results here are for the U.S. division and do not include the positive impact of inflation in gasoline and strengthening foreign currencies. Including those impacts, year-to-date comps increased 7 in the United States, 15% in the international division, and 9% for the total company. 

     "May sales were near the low end of our expected range, driven by a much slower traffic trend in the second half of the month," said Gregg Steinhafel, Taget's chairman, president and ceo. "Our guests continue to shop cautiously in light of higher energy costs and inflationary pressures on their household budgets. As a result, we're focused on delivering more value than ever by offering reliably low prices on high quality, well-designed merchandise both in our stores and at Target. com."
     Sales in the home and furniture category "were significantly below trend" at Little Rock, Ark.-based regional department store Dillard's, even though the retailer eked out a 2.0% overall comp increase.
     On the flip side was York, Pa.-based The Bon-Ton Stores, which reported the highest comp decline of -2.3% for May but called home one of its "best performing categories." Jacksonville, Fla.-based Stein Mart reported better results, 0.7% comp gain, for the month, and thanked home for its help in that achievement.

WINNERS AND LOSERS 

Same-store sales % change

WINNERS 

Macy's Inc.  

7.4% 

Coscto Wholesale Corp.  

6.0% 

Ross Stores 

4.0% 

Duckwall-ALCO Inc.  

3.3% 

BJ's Wholesale Club  

3.0% 

Target Corp.  

2.8% 

Dillard's Inc. / TJX Cos. 

2.0% 

LOSERS 

The Bon-Ton Stores Inc.  

(2.3)% 

J.C.Penney Co.  

(1.0)% 

  

     "Home, ladies' career sportswear, accessories, and men's tailored clothing and furnishings posted the strongest comparable sales, while ladies' special sizes and men's sportswear posted weaker trends," the 261-unit off-price mid-tier department store said. "Geographically, May sales were strongest in the Western and Northeast markets."
     Home, along with accessories and children's, outperformed Kohl's company average, said Kevin Mansell, chairman, president and ceo. But soft home was not credited. Rather, small electrics led the category with double digit increases.
       Leading the pack in May comps was Macy's with a 7.4% increase. But home was not mentioned.
     Instead, chairman, president and ceo Terry Lundgren just said the department store "continued to see very strong sales results in May as every Macy's stores region, Bloomingdale's stores, macys.com and bloomingdales. com all met or exceeded our aggressive expectations. We can attribute this success to the continued crisp execution of our major strategies."
     Even with an 8.5% total sales increase to $1.937 billion, it was the company's online sales from macys.com and bloomingdales. com combined that retained the spotlight, up 37.7% in May and 38.2% year to date.
     Buoyed by these results, Macy's updated its second quarter guidance to include a 5% increase in same-store sales, which would calculate to same-store sales growth of approximately 4.5% for the full year of fiscal 2011. Previous guidance was for same-store sales to increase by 4% in the second quarter and by 4.3% for the full year. As previously noted, year-over-year same-store sales increases in June and July will be lower than in May because of stronger year ago sales in the final two months of the quarter.
     Costco Wholesale Corp., which came in with the second highest comp at 6.0%, called out domestics as one of the category leaders as well as small electrics. Among the two top off-pricers, the winner was Pleasanton, Calif.-based Ross Stores with a 4.0% comp gains versus Framingham, Mass.-based TJX Cos.' 2.0 bump up.

     TJX was "pleased" with the performance of its Marmaxx Group, which includes Home- Goods and Marshalls, as its 4% comp increase showed "continued strong performance...despite the unseasonably cold and wet weather in the key Northeast region. Sales trends picked up as the weather turned warm exiting the month, which bodes well for the important month of June. Further, as we enter June, we are in a great position in terms of the seasonality and quality of our merchandise mix as well as our ability to take advantage of the exciting buys we are seeing in the marketplace," said ceo Carol Meyrowitz.
     Ross Stores' vice chairman and ceo Michael Balmuth described the company's comparable store sales in May as "slightly ahead of our expectations for a 2% to 3% increase."
     It was dresses and accessories - not home - that were Ross' best performing merchandise categories, he noted.

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